London close: Stocks mixed ahead of key UK, US data

27th Jun 2024 15:48

(Sharecast News) - London stocks ended Thursday's trading session with a mixed performance as market participants awaited crucial US inflation data and UK GDP figures set to be released later in the week.

The FTSE 100 dipped 0.55% to close at 8,179.68 points, while the FTSE 250 edged up 0.17%, finishing the day at 20,331.80.

In currency markets, sterling was last up 0.25% on the dollar, trading at $1.2654, while it increased 0.01% against the euro, changing hands at €1.1818.

"While Wall Street has pushed higher and the DAX has made gains this afternoon, the FTSE 100 continues to languish in the red thanks to a slew of names going ex-dividend and bad news for GSK," said IG chief market analyst Chris Beauchamp.

"The latter has gone from a multi-decade high to four-month lows, but now trades around 9 times earnings. Investors who think that the reaction has been overdone might be tempted to go bargain-hunting at these levels."

Beauchamp added that US stocks had "rediscovered" some of their upward momentum this afternoon, though the all-important PCE price data was now less than a day away.

"Should this point towards a further slowdown in price growth then the final day of June trading might go the same way as May's, which saw a strong rally.

"A softer PCE reading could renew hopes of a September rate cut, which have taken a knock of late."

Eurozone economic sentiment unexpectedly declines

In economic news, sentiment in the eurozone saw an unexpected decline in June, according to a survey released by the European Commission.

The economic sentiment indicator (ESI) dipped by 0.2 points to 95.9 in the eurozone and 96.4 in the broader European Union, countering analyst predictions of a slight increase.

Consumer confidence rose marginally by 0.3 points but remained historically low at -14.

The retail sector experienced the most significant drop, falling by 1 point to 7.8, the lowest in over three years.

The European Commission highlighted stable confidence in industry, construction, and among consumers, while noting declines in services and retail trade.

Germany, the eurozone's largest economy, saw its ESI decrease by 0.2 points.

Additionally, the eurozone employment expectations indicator dropped for the third month in a row, falling 1.6 points to 99.7, below its long-term average.

Across the Atlantic, the United States saw a slight decrease in initial unemployment claims last week, although continuing claims rose more than expected, as per data from the Department of Labor.

Initial jobless claims fell to 233,000 for the week ending June 21, down from 239,000 the previous week, beating the forecast of 235,000.

That marked the second consecutive week of declines following a 10-month high of 243,000 in early June.

However, the four-week moving average of claims increased to 236,000 from 232,750. Continuing claims for the week ending June 14 rose to 1.839 million, exceeding the revised figure of 1.821 million and the forecast of 1.820 million.

In central bank action, Sweden's Riksbank announced that it would keep its key interest rate steady at 3.75%, aligning with expectations.

The bank said monetary policy would be adjusted gradually, with potential rate cuts of two or three times in the latter half of the year if inflation projections remained stable.

Turkey's central bank meanwhile maintained its key interest rate at 50% for the third consecutive month.

The country's central bank emphasised its focus on curbing soaring inflation and reiterated its commitment to a tight monetary policy until a significant and sustained decrease in monthly inflation trends was observed.

DS Smith rockets, GSK falls on US health agency ruling

On London's equity markets, DS Smith surged 13.58% following news that Brazilian pulp maker Suzano had ended talks to acquire International Paper (IP).

DS Smith had agreed in April to be bought by IP for £5.8bn.

According to Reuters, Suzano's deal with IP was conditional on IP abandoning its bid for DS Smith.

Halma rose 1.9% after announcing the acquisition of Portuguese fire detection and alarm systems maker Global Fire Equipment (GFE) for £36m.

Bunzl advanced 1.05% after upgrading its profit guidance for the year, citing improved margins and successful acquisitions as key drivers for the better-than-expected performance.

Moonpig Group's shares spiked 15.24% following the online greeting card retailer's report of a significant increase in annual sales and profits, reflecting strong consumer demand and effective business strategies.

Luxury watch retailer Watches of Switzerland gained 8.36% after it maintained its current-year guidance and expressed cautious optimism despite a decline in annual profits due to reduced discretionary spending.

Serco shares climbed 4.15% after the company upgraded its full-year profit guidance, citing "good" progress in the first half of the year as a contributing factor to the improved outlook.

GSK shares dropped 4.81% after a US health agency ruling restricted usage recommendations for all respiratory syncytial virus (RSV) vaccines, thereby narrowing the market for GSK's Arexvy product.

Currys fell 5.79% despite the electricals retailer reporting that trading in the current fiscal year was in line with expectations.

The company saw a 10% rise in 2023-2024 adjusted earnings, with recovery noted in its Nordics division.

Burberry shares declined 6.24% as the luxury fashion brand traded without entitlement to its latest dividend.

Anglo American slipped 1.6% following a downgrade from 'hold' to 'sell' by Berenberg, affecting the mining company's stock performance.

Reporting by Josh White for Sharecast.com.